Second-Best Pollution Taxation and Environmental Quality

This paper deals with second-best pollution taxation by investigating allocations instead of the corresponding tax rates. Assuming certain restrictions on utility and that the marginal revenue from environmental taxation is positive, it is shown that environmental quality is higher in second best where only distortionary taxes are used to finance public expenditures than in the first-best optimum where lump-sum taxes are available.

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Year of publication:	2005-04
Authors:	Gaube, Thomas
Institutions:	Max-Planck-Institut zur Erforschung von Gemeinschaftsgütern, Max-Planck-Gesellschaft
Subject:	environmental taxation \| public goods

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Extent:	application/pdf
Series:	Working Paper Series of the Max Planck Institute for Research on Collective Goods.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Published in Frontiers of Economic Analysis & Policy 1, 2005, No. 1, Article 1 Number 2005_9 17 pages
Classification:	H21 - Efficiency; Optimal Taxation ; H41 - Public Goods
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10008633205